Construction Expo 2013: Rental reaffirms trend for growth in Brazil

Companies in the sector present integrated solutions and debate the importance of equipment rental to the construction business chain

Few themes were as prominent or achieved as much visibility at Construction Expo 2013 as ‘Rental of Equipment for Construction’. Both at the fair - which gathered the widest range of players in the construction business chain offering the most varied of solutions, and at the Congress - which assembled nearly 2,000 people around issues of the highest relevance, Rental was front and center, in the spotlight. Construction Expo 2013, which takes place every three years, was promoted by Sobratema from June 5th to 8th, attracting around 23,000 visitors to the ‘Centro de Exposições Imigrantes’ (Imigrantes Exhibition Center) in the city of São Paulo (SP).
One of the high points of the participation of the equipment rental sector was the ‘1º Congresso Nacional de Valorização do Rental’ (1st National Congress for the Promotion of Rental), which took place on the 6th of June. The event brought together representatives of the largest companies in the sector, as well as trade unions and representative associations, in order to underscore the advantages of renting machines compared to the purchase of equipment. For participants in Congress, Rental has a trajectory of growth ensured for years to come. In the United States, for example, the rental market has grown over 60%. In the UK, the percentage of rented machinery compared to total equipment is as high as 80%. In Brazil, the segment accounts for only 30% of the market for construction equipment.

Paulo Esteves, director of Solaris, underscored that one of the advantages of rental is protection against the instabilities of the Brazilian economy. “In periods of strong swings in the FX rate compared to the US dollar, with the interference in the rate by the Brazilian government and by international economic scenario, those who import machinery become hostages of the exchange rate,” he said. Esteves recalled that the U.S. dollar has appreciated against the Brazilian real. Therefore, the entrepreneur who buys a machine will have, besides the risk of inherent to his own business, the uncertainty of the FX rate. Increased financing capacity, cost control, utilization of the appropriate equipment and support provided by the renter were other benefits mentioned as advantages for those who decide to rent instead of buy.
To managers of rental companies, the Brazilian market still imposes a lot of problems and deficiencies that result in restrictions that hinder the growth of the sector. Among these problems is the cost of labor and the need to train operators which reduces rental company profit margins. “Social charges on wages reach 108% and the hourly cost of workers is close to R$ 50 (US$ 25),” said Alisson Daniel Gomes, director of Escad Rental.

Reinaldo Fraiha Nunes, president of the ‘Sindicato das Empresas Locadoras de Equipamentos, Máquinas, Ferramentas e Serviços’ (Sindileq – Union of Equipment, Tool and Service Rental Companies) of the state of Pernambuco also pointed out the need for formulation of more complete and clear contracts. “The document must have, for example, clauses establishing the conditions that the equipment is delivered in and the responsibility for damage. Only then will rental get more respect and appreciation.”

Thematic hall

Besides the Congress, the rental sector marked its presence at Construction Expo 2013 with a thematic exhibit hall that brought together some of the biggest companies in the industry. Participating were companies as large as Escad, Sotreq, CHB rentals, Tuka Rental, Retrolula and Luna Rentals. The thematic hall was further honored by the Union of Lessors Business Equipment, Machinery, Tools and Related Services of the ‘Sindicato das Empresas Locadoras de Equipamentos, Máquinas, Ferramentas e Serviços’ of the state of Minas Gerais (Sindileq-MG  Union of Equipment, Tool and Service Rental Companies), the chapter of Sindileq of the state of Pernanbuco, (Sindileq-PE), the ‘Associação Bahiana das Empresas de Locação de Máquinas e Equipamentos’ (Abelme- Association of Equipment Rental Companies of the State of Bahia), the ‘Associação Paulista dos Empreiteiros e Locadores de Máquinas de Terraplanagem e Ar Comprimido’ (Apelmat -  São Paulo Association of Contractors and Renters of Earthmoving Machinery and Compressed Air) and the ‘Associação dos Locadores de Equipamentos para a Construção Civil’ (Alec - Association of Civil Construction Equipment Rental Companies).
Outside the Thematic Exhibit Hall, but participating in the trade show with their own stands were Loctrator, Locar, NAS do Brasil, Lafaete, Machbert, Transreta, Tecno Fast Atco, D2 CAT, Grupo Convicta and Central Locadora.